Re: Cobas AM: Nueva Gestora de Francisco García Paramés
Greg Barnes
Okay. So second question, and Tim, you noted that the CRA decision could come any day. But Grant, could you clarify when the decision comes down if it goes against you is there a big cash payment required? If it goes for you do you get that prepayment back immediately? How is this going to play out when that decision comes down?
Grant Isaac
Yes, Greg, thank you for that question. I think there is a bit of confusion on what that exactly looks like. And we'll take some responsibility for it. Because remember, we have a lot of voluntary disclosure out there on this case. We have put this voluntary disclosure out there that suggests that what the worst case scenario, for example, would look like for '03 all the way to 2017. And in that worst case scenario we're talking about a potential $2 billion cash liability. But it's important to emphasize, there is no outcome where all of that would be due at once, even in an adverse decision. And the reason is that's voluntary disclosure that pertains to years that are well beyond what's before the court. And actually well beyond what we've actually been reassessed on.
What's before the court is '03, '05, and'06 only. What we've actually been reassessed on is'03 to 2012, so there's a number of years in there where they aren't even before the court. So, a court decision pertaining to '03, '05, and '06 from a financial management point of view is very manageable. If we had an adverse outcome, an outcome that we're certainly not expecting we're talking about an immaterial cash impact on us something less than $10 million. To be added to the 50% that we've already parked with that and then of course that decision would have to be appealed if we didn't like it, appealed by the CRA. if they didn't like it so there would be an appeal process that would apply and those appeal process would have to be run through before we were in a position to say what 03, 05 and 06 meant for the years that we've been reassessed 07 to 2012.
Let alone 2013 to 2017, so even though we have a lot of voluntary disclosure out there is just important to emphasize there is no moment where that worst can case scenario is do instead we see a multi-year process to understand the 03, 05, 06 decision to go through the appeals process if that happens to then determine how that decision applies to the years we've been reassessed 07 to 12 and then how that applies to the years that we haven't even been reassessed for, so very manageable it's why we say that that the steps we've taken to build cash maintain our investment grade rating to put us in a position to self manage risk it's with this view that there's a long process that would play out and that would be that and I think that's not a legal description of it that's just the financial management description of the liability Greg
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